Madras High Court

M/S.Datamark Prodapt India Bpo ... vs The Joint Commissioner Of Gst on 10 March, 2023

    2023:MHC:1113



                                                                                  W.P.No.17732 of 2020

                                     IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                       DATED: 10.03.2023

                                                            CORAM :

                                      The HONOURABLE DR.JUSTICE ANITA SUMANTH

                                                      W.P.No.17732 of 2020

                     M/s.Datamark Prodapt India BPO LLP
                     Prince Infopark, Block-A, 6th Floor,
                     Plot No.81-B, 2nd Main Road,
                     Ambattur Industrial Estate,
                     Chennai – 58.                                                        .. Petitioner

                                                                vs

                     The Joint Commissioner of GST
                     Ambattur Division, III Range,
                     R-40,A-1,100 Feet Road,
                     Mugappair East, Chennai – 600 037.                                 .. Respondent



                                  Petition filed under Article 226 of the Constitution of India

                     praying to issue a writ of certiorarified mandamus, calling for the

                     records         of   the      respondent   in    order   dated   03.11.2020    in

                     C.No.IV/10/322/2019 and quash the same, and further direct the

                     respondent to grant refund of Rs.10,91,422/- (Rupees Ten Lakhs

                     Ninety One Thousand Four Hundred and Twenty Two Only) to the

                     petitioner.


                                  For Petitioner            :        Mr.Adithya Reddy

                                  For Respondent            :        Mr.K.Umesh Rao


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                                                                          W.P.No.17732 of 2020



                                                        ORDER

A reading of the trajectory of events that have

transpired in this matter would reveal the tortured attempts by the

Assessee and the Department, the former seeking to avail CENVAT

credit that was available to it and the latter calling on every

provision under the Act, to deny its eligibility.

2. The Goods and Services Tax (GST) came into effect

from 01.07.2017. The petitioner has credit of CENVAT of a sum of

Rs.10 lakh (approx) for the months of April, May, June, 2017. The

law entitles an assessee to seek refund of CENVAT credit within a

period of one year from year from the date of export. It all started

with an application dated 25.10.2017 where the petitioner sought

refund of CENVAT credit under Rule 5 for the months of April, May,

June, 2017.

3. With the onset of GST, the petitioner was required to

make a debit to the CENVAT credit account at the time of effecting

the claim. This is not even statutory requirement and only flows

from Notification No.27 / 2012 – CE(NT) dated 18.06.2012. In this

Notification, the Central Board of Excise and Customs (Board) has

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W.P.No.17732 of 2020

suggested certain safeguards, conditions and limitations for the

availment of refund of CENVAT credit and states at Clause 2(h) that

any refund claim shall have a corresponding debit to the CENVAT

credit account simultaneous with making the claim.

4. The Board evidently omitted to note that with the

enactment of Central Goods and Services Tax Act, 2017, CENVAT

credit account would be disabled. This is what has in fact transpired

in not just the present case, but in the cases of several similarly

placed assesses who have sought identical relief.

5. The only difference between those assesses and the

present is that when the petitioner's application was returned by the

authority citing the condition under Notification No.27/2012, this

petitioner being more compliant sought to adopt other measures to

obtain the relief.

6. In the cases of other assessees they approached the

Courts / authorities directly in BNP Paribas Global Securities

Operations Private Limited v The Assistant Commissioner of GST &

Central Excise (MANU/TN/3063/2021), Global Analytics India Pvt ltd

vs The Commissioner of G.S.T & Central Excise [2019 (7) TMI

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W.P.No.17732 of 2020

1185], Zamil Steel Engineering India Pvt Ltd vs Commissioner of

CGST & Central Excise [2020 (5) TMI 611], Mysy Tech India Private

Limited v The Commissioner of GST & CE [Appeals-II] [2020 (3)

TMI 754] and Sundaram Business Service ltd v Commissioner of

GST & CE (Appeals-I) Chennai [2020 (2) TMI 908] and this Court

and the CESTAT have noted the impossibility compliance with this

condition.

7. No doubt, as learned standing counsel points out, it is

only with the march of law that this error has come to light and

been corrected. However, it is a fact that CENVAT account was

disabled with the onset of GST and for the authorities to have

insisted on compliance of Notification No.27/2012 is itself a patent

error. I am thus of the considered view this should not stand in the

way of the petitioner, being entitled to relief, if it is otherwise so

entitled.

8. To complete the narration, the petitioner thereafter filed

an application for refund under Section 54 of the Act on

17.01.2019. The claim was rejected as against which a first appeal

was filed which also came to be rejected on 30.07.2020. The

reasoning set out in the order of the appellate authority is based on

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W.P.No.17732 of 2020

the provisions of Section 54 and the second proviso to Section

142(4) of the Act as well as a circular issued by the Board on

15.03.2018.

9. The Circular states that there shall be no refund except

in the circumstances set out thereunder and admittedly, the

petitioner does not comply with the conditions. However, I am of

the considered view that this is not relevant insofar as the flaw in

this case has already been occasioned at an anterior stage, on the

basis of an incorrect Notification issued by the Board.

10. Not content with the confusion caused thus far, the

petitioner while not challenging the order of the Appellate

Commissioner, makes a further representation on 28.08.2020.

Inter-alia it cites the decision of this Court and of the CESTAT

referred to paragraph 6 of this order, praying that its application for

refund be considered, excluding the time spent before the GST

authorities, as that was clearly a wrong forum. The impugned order

has been passed on 03.11.2010 on the sole ground that, as the

order of the first appellate authority dated 30.07.2020 has attained

finality, the question of refund does not arise.

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W.P.No.17732 of 2020

11. This order is patently erroneous on several grounds.

Firstly, the eligibility of the petitioner to refund on a substantive

basis has itself, never been questioned. The denial is based solely

on a technical basis.

12. That apart, the fact that Notification No.27/12 has been

held to propound an incorrect condition by this Court as well as by

the CESTAT ought to have merited consideration with the authority.

Instead he does not advert to this aspect of the matter at all.

13. Further, the claim is fully supported by the provisions of

Section 142(3) of the Act, that reads as follows:-

“Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-

section (2) of Section 11B of the Central Excise Act, 1944(1 of 1944).”

14. Seen in the above context, the impugned order is wholly

incorrect in law and is liable to be set aside, and I do so.

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W.P.No.17732 of 2020

15. I may mention at this juncture that the learned

Standing Counsel also seeks to advance other arguments not

advanced by the officer in the impugned order. It would be

improper to improve the impugned order based on the judgment of

the Hon'ble Supreme Court in the case of Mohinder Singh Gill v

Chief Election Commissioner (1978 (1) SCC 405), as per which an

order would have to stand or fail on the strength of the reasoning